[Federal Register Volume 65, Number 5 (Friday, January 7, 2000)]
[Notices]
[Pages 1103-1110]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-298]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-560-807]
Notice of Preliminary Determination of Sales at Less Than Fair
Value and Postponement of Final Determination: Certain Cold-Rolled
Flat-Rolled Carbon-Quality Steel Products From Indonesia
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: January 7, 2000.
FOR FURTHER INFORMATION CONTACT: Arland DiGirolamo or Gabriel Adler at
(202) 482-1278 or (202) 482-1442, respectively; Import Administration,
Room 1870, International Trade Administration, U.S. Department of
Commerce, 14th Street and Constitution Avenue, NW, Washington, DC
20230.
The Applicable Statute and Regulations
Unless otherwise indicated, all citations to the statute are
references to the provisions effective January 1, 1995, the effective
date of the amendments made to the Tariff Act of 1930 (the Act) by the
Uruguay Round Agreements Act (URAA). In addition, unless otherwise
indicated, all citations to Department of Commerce (Department)
regulations refer to the regulations codified at 19 CFR part 351 (April
1999).
Preliminary Determinations
We preliminarily determine that cold-rolled flat-rolled carbon-
quality steel products (cold-rolled steel products) from Indonesia are
being sold, or are likely to be sold, in the United States at less than
fair value (LTFV), as provided in section 733 of the Act. The estimated
margins of sales at LTFV are shown in the Suspension of Liquidation
section of this notice.
Case History
This investigation was initiated on June 21, 1999.1 See
Initiation of Antidumping Duty Investigations: Certain Cold-Rolled
Flat-Rolled Carbon-Quality Steel Products from Argentina, Brazil, the
People's Republic of China, Indonesia, Japan, the Russian Federation,
Slovakia, South Africa, Taiwan, Thailand, Turkey, and Venezuela, 64 FR
34194 (June 25, 1999) (Initiation Notice). Since the initiation of the
investigation, the following events have occurred.
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\1\ The petitioners in this investigation are Bethlehem Steel
Corporation, Gulf States Steel, the Independent Steelworkers Union,
Ispat Inland Steel, LTV Steel Company Inc., National Steel
Corporation (not a petitioner in the Japan case), Steel Dynamics,
U.S. Steel Group (a unit of USX Corporation), Weirton Steel
Corporation, and United Steelworkers of America.
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The Department issued an antidumping questionnaire to PT Krakatau,
the only known producer of cold rolled steel products in Indonesia, on
June 22, 1999 (Section A) and July 9, 1999 (Sections B through
D).2 We issued supplemental questionnaires where
appropriate. PT Krakatau submitted timely responses to the Department's
questionnaires.
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\2\ Section A of the questionnaire requests general information
concerning a company's corporate structure and business practices,
the merchandise under investigation that it sells, and the manner in
which it sells that merchandise in all of its markets. Section B
requests a complete listing of all home market sales, or, if the
home market is not viable, of sales in the most appropriate third-
country market. Section C requests a complete listing of U.S. sales.
Section D requests information on the cost of production (COP) of
the foreign like product and the constructed value (CV) of the
merchandise under investigation.
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On July 16, 1999, the United States International Trade Commission
(the ITC) preliminarily determined that there is a reasonable
indication that imports of the products under investigation are
materially injuring the United States industry. See Certain Cold-Rolled
Steel Products From Argentina, Brazil, China, Indonesia, Japan, Russia,
Slovakia, South Africa, Taiwan, Thailand, Turkey, and Venezuela:
Determinations, 64 FR 41458 (July 30, 1999).
On November 5, 1999, the Department postponed the preliminary
determination in this case for 30 days in accordance with section
733(c) of the Act and 19 CFR 351.205(b)(2). See Notice of Postponement
of Preliminary Antidumping Duty Determinations: Certain Cold-Rolled
Flat-Rolled Carbon-Quality Steel Products from Indonesia, the People's
Republic of China, Taiwan and Turkey, 64 FR 61825 (November 15, 1999).
Postponement of Final Determination and Extension of Provisional
Measures
Section 735(a)(2) of the Act provides that a final determination
may be postponed until not later than 135 days after the date of the
publication of the preliminary determination if, in the event of an
affirmative preliminary determination, a request for such postponement
is made by exporters who account for a significant proportion of
[[Page 1104]]
exports of the subject merchandise or if, in the event of a negative
preliminary determination, a request for such postponement is made by
the petitioners. The Department's regulations, at 19 CFR 351.210(e)(2),
require that requests by respondents for postponement of a final
determination be accompanied by a request for extension of provisional
measures from a four-month period to not more than six months. On
October 22, 1999, PT Krakatau filed a request for the postponement of
the final determination in the event of an affirmative preliminary
determination. On October 28, PT Krakatau filed a request for the
extension of provisional measures from a four-month period to not more
than six months in the event that the Department postpones the final
determination. Accordingly, since we have made an affirmative
preliminary determination, we have postponed the final determination
until not later than 135 days after the date of the publication of the
preliminary determination.
Period of Investigation
The period of the investigation (POI) is April 1, 1998 through
March 31, 1999. This period corresponds to the respondent's four most
recent fiscal quarters prior to the month of the filing of the petition
(i.e., June 1999).
Scope of Investigation
For purposes of this investigation, the products covered are
certain cold-rolled (cold-reduced) flat-rolled carbon-quality steel
products, neither clad, plated, nor coated with metal, but whether or
not annealed, painted, varnished, or coated with plastics or other non-
metallic substances, both in coils, 0.5 inch wide or wider, (whether or
not in successively superimposed layers and/or otherwise coiled, such
as spirally oscillated coils), and also in straight lengths, which, if
less than 4.75 mm in thickness having a width that is 0.5 inch or
greater and that measures at least 10 times the thickness; or, if of a
thickness of 4.75 mm or more, having a width exceeding 150 mm and
measuring at least twice the thickness. The products described above
may be rectangular, square, circular or other shape and include
products of either rectangular or non-rectangular cross-section where
such cross-section is achieved subsequent to the rolling process (i.e.,
products which have been ``worked after rolling'')--for example,
products which have been beveled or rounded at the edges.
Specifically included in this scope are vacuum degassed, fully
stabilized (commonly referred to as interstitial-free (IF)) steels,
high strength low alloy (HSLA) steels, and motor lamination steels. IF
steels are recognized as low carbon steels with micro-alloying levels
of elements such as titanium and/or niobium added to stabilize carbon
and nitrogen elements. HSLA steels are recognized as steels with micro-
alloying levels of elements such as chromium, copper, niobium,
titanium, vanadium, and molybdenum. Motor lamination steels contain
micro-alloying levels of elements such as silicon and aluminum.
Steel products included in the scope of this investigation,
regardless of definitions in the Harmonized Tariff Schedules of the
United States (HTSUS), are products in which: (1) Iron predominates, by
weight, over each of the other contained elements; (2) the carbon
content is 2 percent or less, by weight, and; (3) none of the elements
listed below exceeds the quantity, by weight, respectively indicated:
1.80 percent of manganese, or
2.25 percent of silicon, or
1.00 percent of copper, or
0.50 percent of aluminum, or
1.25 percent of chromium, or
0.30 percent of cobalt, or
0.40 percent of lead, or
1.25 percent of nickel, or
0.30 percent of tungsten, or
0.10 percent of molybdenum, or
0.10 percent of niobium (also called columbium), or
0.15 percent of vanadium, or
0.15 percent of zirconium.
All products that meet the written physical description, and in
which the chemistry quantities do not exceed any one of the noted
element levels listed above, are within the scope of this investigation
unless specifically excluded. The following products, by way of
example, are outside and/or specifically excluded from the scope of
this investigation:
SAE grades (formerly also called AISI grades) above 2300;
Ball bearing steels, as defined in the HTSUS;
Tool steels, as defined in the HTSUS;
Silico-manganese steel, as defined in the HTSUS;
Silicon-electrical steels, as defined in the HTSUS, that are
grain-oriented;
Silicon-electrical steels, as defined in the HTSUS, that are
not grain-oriented and that have a silicon level exceeding 2.25
percent;
All products (proprietary or otherwise) based on an alloy ASTM
specification (sample specifications: ASTM A506, A507);
Silicon-electrical steels, as defined in the HTSUS, that are
not grain-oriented and that have a silicon level less than 2.25
percent, and (a) fully-processed, with a core loss of less than 0.14
watts/pound per mil (.001 inches), or (b) semi-processed, with core
loss of less than 0.085 watts/pound per mil (.001 inches);
Certain shadow mask steel, which is aluminum killed cold-
rolled steel coil that is open coil annealed, has an ultra-flat,
isotropic surface, and which meets the following characteristics:
Thickness: 0.001 to 0.010 inches
Width: 15 to 32 inches
Chemical Composition:
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Element................................................ C
Weight %............................................... < 0.002%="" ------------------------------------------------------------------------=""> Certain flapper valve steel, which is hardened and tempered,
surface polished, and which meets the following characteristics:
Thickness: 1.0 mm
Width: 152.4 mm
Chemical Composition:
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Element........................... C Si Mn P S
Weight %.......................... 0.90-1.05 0.15-0.35 0.30-0.50 0.03 0.006
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[[Page 1105]]
Mechanical Properties
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Tensile Strength....................... 162 Kgf/mm \2\
Hardness............................... 475 Vickers
hardness number
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Physical Properties
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Flatness............................... < 0.2%="" of="" nominal="" strip="" width="" ------------------------------------------------------------------------="" microstructure:="" completely="" free="" from="" decarburization.="" carbides="" are="" spheroidal="" and="" fine="" within="" 1%="" to="" 4%="" (area="" percentage)="" and="" are="" undissolved="" in="" the="" uniform="" tempered="" martensite.="" non-metallic="" inclusion="" ------------------------------------------------------------------------="" area="" percentage="" ------------------------------------------------------------------------="" sulfide="" inclusion.......................................="">0.0
4%
Oxide Inclusion......................................... 0.0
5%
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Compressive Stress: 10 to 40 Kgf/mm\2\.
Surface Roughness
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Roughness
Thickness (mm) (m)
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t 0.209...................................... Rz 0.5
0.209 < t="">0.310.............................. Rz 0.6
0.310 < t="">0.440.............................. Rz 0.7
0.440 < t="">0.560.............................. Rz 0.8
0.560 < t...............................................="" rz="">1.0
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Certain ultra thin gauge steel strip, which meets the
following characteristics:
Thickness: 0.100 mm +/-7%
Width: 100 to 600 mm
Chemical Composition
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Element........................ C Mn P S Al Fe
Weight %....................... 0.07 0.2-0.5 0.05 0.05 0.07 Balance
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Mechanical Properties
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Hardness............................... Full Hard (Hv 180 minimum)
Total Elongation....................... <3% tensile="" strength.......................="" 600="" to="" 850="" n/mm\2\="" ------------------------------------------------------------------------="" physical="" properties="" ------------------------------------------------------------------------="" ------------------------------------------------------------------------="" surface="" finish.........................="">0.3 micron
Camber (in 2.0 m)...................... <3.0 mm="" flatness="" (in="" 2.0="" m)....................="">0.5 mm
Edge Burr.............................. <0.01 mm="" greater="" than="" thickness="" coil="" set="" (in="" 1.0="" m)....................=""><75.0 mm="" ------------------------------------------------------------------------=""> Certain silicon steel, which meets the following
characteristics:
Thickness: 0.024 inches +/-.0015 inches
Width: 33 to 45.5 inches
Chemical Composition
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Element........................ C Mn P S Si Al
Min. Weight %.................. 0.65
Max. Weight %.................. 0.004 0.4 0.09 0.009 0.4
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Mechanical Properties
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Hardness............................... B 60-75 (AIM 65)
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[[Page 1106]]
Physical Properties
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Finish................................. Smooth (30-60 microinches).
Gamma Crown (in 5 inches).............. 0.0005 inches, start measuring
\1/4\ inch from slit edge.
Flatness............................... 20 I-UNIT max.
Coating................................ C3A-.08A max. (A2 coating
acceptable).
Camber (in any 10 feet)................ \1/16\ inch.
Coil Size I.D.......................... 20 inches.
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Magnetic Properties
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Core Loss (1.5T/60 Hz)................. 3.8 Watts/Pound max.
NAAS
Permeability (1.5T/60 Hz).............. 1700 gauss/oersted typical.
NAAS................................... 1500 minimum.
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Certain aperture mask steel, which has an ultra-flat surface
flatness and which meets the following characteristics:
Thickness: 0.025 to 0.245 mm
Width: 381-1000 mm
Chemical Composition
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Element............................. C N Al
Weight %............................ < 0.01="" 0.004="" to="" 0.007="">< 0.007="" ----------------------------------------------------------------------------------------------------------------=""> Certain tin mill black plate, annealed and temper-rolled,
continuously cast, which meets the following characteristics:
Chemical Composition
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Element...................... C Mn P S Si Al As Cu B N
Min. Weight %................ 0.02 0.20 0.03 0.003
Max. Weight %................ 0.06 0.40 0.02 0.023 0.03 0.08 0.02 0.08 0.008 (Aiming
(Aiming (Aiming 0.005)
0.018 0.05)
Max.)
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Non-metallic Inclusions: Examination with the S.E.M. shall not
reveal individual oxides >1 micron (0.000039 inches) and inclusion
groups or clusters shall not exceed 5 microns (0.000197 inches) in
length.
Surface Treatment as follows:
The surface finish shall be free of defects (digs, scratches, pits,
gouges, slivers, etc.) and suitable for nickel plating.
Surface Finish
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Roughness, RA Microinches (Micrometers)
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Aim Min. Max.
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Extra Bright........................ 5 (0.1) 0 (0) 7 (0.2)
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Certain full hard tin mill black plate, continuously cast,
which meets the following characteristics:
Chemical Composition
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Element...................... C Mn P S Si Al As Cu B N
Min. Weight %................ 0.02 0.20 .......... ........ .......... 0.03 .......... .......... .......... 0.003
Max. Weight %................ 0.06 0.40 0.02 0.023 0.03 0.08 0.02 0.08 .......... 0.008 (Aiming
(Aiming (Aiming 0.005)
0.018 0.05)
Max.)
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Non-metallic Inclusions: Examination with the S.E.M. shall not
reveal individual oxides > 1 micron (0.000039 inches) and inclusion
groups or clusters shall not exceed 5 microns (0.000197 inches) in
length.
Surface Treatment as follows:
The surface finish shall be free of defects (digs, scratches, pits,
gouges, slivers, etc.) and suitable for nickel plating.
[[Page 1107]]
Surface Finish
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Roughness, RA Microinches (Micrometers)
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Aim Min. Max.
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Stone Finish........................ .16 (0.4) 8 (0.2) 24 (0.6)
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Certain ``blued steel'' coil (also known as ``steamed blue
steel'' or ``blue oxide'') with a thickness and size of 0.38 mm x 940
mm x coil, and with a bright finish;
Certain cold-rolled steel sheet, which meets the following
characteristics:
Thickness (nominal): 0.019 inches
Width: 35 to 60 inches
Chemical Composition
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Element C O B
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Element............................. C O B
Max. Weight %....................... 0.004
Min. Weight %....................... 0.010 0.012
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Certain band saw steel, which meets the following
characteristics:
Thickness: 1.31 mm
Width: 80 mm
Chemical Composition
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Element........................ C Si Mn P S Cr Ni
Weight %....................... 1.2 to 1.3 0.15 to 0.35 0.20 to 0.35 0.03 0.007 0.3 to 0.5 0.25
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Other properties:
Carbide: fully spheroidized having > 80% of carbides, which are
0.003 mm and uniformly dispersed
Surface finish: bright finish free from pits, scratches, rust,
cracks, or seams
Smooth edges
Edge camber (in each 300 mm of length): 7 mm arc height
Cross bow (per inch of width): 0.015 mm max.
The merchandise subject to this investigation is typically
classified in the HTSUS at subheadings: 7209.15.0000, 7209.16.0030,
7209.16.0060, 7209.16.0090, 7209.17.0030, 7209.17.0060, 7209.17.0090,
7209.18.1530, 7209.18.1560, 7209.18.2550, 7209.18.6000. 7209.25.0000,
7209.26.0000, 7209.27.0000, 7209.28.0000, 7209.90.0000, 7210.70.3000,
7210.90.9000, 7211.23.1500, 7211.23.2000, 7211.23.3000, 7211.23.4500,
7211.23.6030, 7211.23.6060, 7211.23.6085, 7211.29.2030, 7211.29.2090,
7211.29.4500, 7211.29.6030, 7211.29.6080, 7211.90.0000, 7212.40.1000,
7212.40.5000, 7212.50.0000, 7225.19.0000, 7225.50.6000, 7225.50.7000,
7225.50.8010, 7225.50.8085, 7225.99.0090, 7226.19.1000, 7226.19.9000,
7226.92.5000, 7226.92.7050, 7226.92.8050, and 7226.99.0000.
Although the HTSUS subheadings are provided for convenience and
U.S. Customs Service (U.S. Customs) purposes, the written description
of the merchandise under investigation is dispositive.
The Department set aside a period for all interested parties to
raise issues regarding product coverage. From July through October
1999, the Department received responses from a number of parties
including importers, respondents, consumers, and petitioners, aimed at
clarifying the scope of the investigation. See Memorandum to Joseph A.
Spetrini (Scope Memorandum), November 1, 1999, for a list of all
persons submitting comments and a discussion of all scope comments.
There are several scope exclusion requests for products which are
currently covered by the scope of this investigation that are still
under consideration by the Department. These items are considered to be
within the scope for this preliminary determination; however, these
requests will be reconsidered for the final determination. See Scope
Memorandum.
Selection of Respondents
Section 777A(c)(1) of the Act directs the Department to calculate
individual dumping margins for each known exporter and producer of the
subject merchandise. We determined that PT Krakatau was the only known
exporter of subject merchandise and therefore chose it as the only
respondent from Indonesia. This company accounted for 100 percent of
all known exports of the subject merchandise during the POI.
Product Comparisons
In accordance with section 771(16) of the Act, all products
produced by the respondents covered by the description in the Scope of
Investigation section, above, and sold in Indonesia during the POI are
considered to be foreign like products for purposes of determining
appropriate product comparisons to U.S. sales. We have relied on 14
criteria to match U.S. sales of subject merchandise to comparison-
market sales of the foreign like product: hardening and tempering,
paint, carbon level, quality, yield strength, minimum thickness,
thickness tolerance, width, edge finish, form, temper rolling,
leveling, annealing, and surface finish. These characteristics have
been weighted by the Department where appropriate. Where there were no
sales of identical merchandise in the home market to compare to U.S.
sales, we compared U.S. sales to the next most similar foreign like
product on the basis of the characteristics listed above.
Fair Value Comparisons
To determine whether sales of cold-rolled steel products from
Indonesia were made in the United States at less than fair value, we
compared the export
[[Page 1108]]
price (EP) to the normal value (NV), as described in the Export Price
and Normal Value sections of this notice. In accordance with section
777A(d)(1)(A)(i) of the Act, we calculated weighted-average EPs for
comparison to weighted-average normal values. Indonesia experienced
high inflation during the POI, as measured by the Wholesale Price
Index, published in the June 1999 issue of International Financial
Statistics. Accordingly, to avoid distortions caused by the effects of
high inflation on prices, consistent with our practice in cases
involving high inflation, we calculated EPs and NVs on a monthly-
average basis, rather than a POI average basis.3 See Notice
of Preliminary Determination of Sales at Less Than Fair Value and
Postponement of Final Determination: Certain Pasta from Turkey, 61 FR
1351, 1354 (January 19, 1996).
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\3\ Investigations involving exports from countries with highly
inflationary economies require special methodologies for comparing
prices and calculating CV and COP. The Department generally
considers that an inflation rate in excess of 25 percent warrants
application of a calculation methodology that takes into account the
effect of high inflation on prices and costs. See Notice of
Preliminary Determination of Sales at Less Than Fair Value:
Stainless Steel Sheet and Strip in Coils from South Korea, 64 FR
137, 139 (January 4, 1999). Based on the Wholesale Price Index (WPI)
obtained from the International Monetary Fund (IMF), we determined
that Indonesia experienced inflation of approximately 40 percent
over the course of the POI. PT Krakatau has argued that the
Department should not employ a high inflation analysis because the
high inflation that occurred during the POI was isolated to the
first six months of the period. We will consider this issue further
for the final determination, and invite parties to comment.
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Export Price
In accordance with section 772 of the Act, we calculated an EP for
each sale. Section 772(a) of the Act defines EP as the price at which
the subject merchandise is first sold before the date of importation by
the exporter or producer outside the United States to an unaffiliated
purchaser in the United States or to an unaffiliated purchaser for
exportation to the United States. Consistent with this definition, we
have found that PT Krakatau made only EP sales during the POI.
We based EP on ex-factory and FOB prices to unaffiliated customers
in the United States. In accordance with section 772(c)(2) of the Act,
we made deductions from the starting price, where appropriate, for
movement expenses including foreign brokerage and inland freight from
the factory to the foreign port.
Normal Value
A. Selection of Comparison Markets
Section 773(a)(1) of the Act directs that NV be based on the price
at which the foreign like product is sold in the home market, provided
that the merchandise is sold in sufficient quantities (or value, if
quantity is inappropriate) and that there is no particular market
situation that prevents a proper comparison with the EP. The statute
contemplates that quantities (or value) will normally be considered
insufficient if they are less than five percent of the aggregate
quantity (or value) of sales of the subject merchandise to the United
States.
PT Krakatau has a viable home market of cold-rolled steel products,
and it reported home market sales data for purposes of the calculation
of NV.
In deriving NV, we made adjustments as detailed in the Calculation
of Normal Value Based on Home Market Prices and Calculation of Normal
Value Based on Constructed Value, below.
B. Cost of Production Analysis
Based on allegations made by petitioner in this case in a
submission dated September 29, 1999, and in accordance with section
773(b)(2)(A)(i) of the Act, we found reasonable grounds to believe or
suspect that sales of cold-rolled steel products made in Indonesia were
made at prices below the COP. As a result, the Department has conducted
an investigation to determine whether PT Krakatau made sales in its
home market at prices below their respective COPs during the POI within
the meaning of section 773(b) of the Act. We conducted the COP analysis
described below.
1. Calculation of COP. In accordance with section 773(b)(3) of the
Act, we calculated a weighted-average COP based on the sum of the cost
of materials and fabrication for the foreign like product, plus amounts
for the home market general and administrative (G&A) expenses, selling
expenses, commissions, packing expenses, and interest expenses. As
noted above, we determined that the Indonesian economy experienced
significant inflation during the POI. Therefore, in order to avoid the
distorting effect of inflation on our comparison of costs and prices,
we computed indexed monthly costs based on the weighted average of all
monthly costs as indexed over the POI. See, e.g., Certain Steel
Concrete Reinforcing Bar from Turkey, 64 FR 49510, 49153 (September 10,
1999).
We relied on the COP data submitted by PT Krakatau in its cost
questionnaire response, except, as noted below, in specific instances
where the submitted costs were not appropriately quantified or valued:
(a) we adjusted the reported depreciation expense to account for the
effects of inflation, (b) we computed the respondent's G&A and
financial expense ratios on a constant currency basis using monthly IMF
WPI indices, and (c) we recalculated the reported G&A and financial
expense ratios to reflect certain expenses and offsets that had not
been completely accounted for by the respondent.
2. Test of Home Market Sales Prices. We compared the adjusted
weighted-average COP to the home market sales of the foreign like
product, as required under section 773(b) of the Act, in order to
determine whether these sales had been made at prices below the COP
within an extended period of time (i.e., a period of one year) in
substantial quantities 4 and whether such prices were
sufficient to permit the recovery of all costs within a reasonable
period of time.
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\4\ In accordance with section 773(b)(2)(C)(i) of the Act, we
determined that sales made below the COP were made in substantial
quantities if the volume of such sales represented 20 percent or
more of the volume of sales under consideration for the
determination of NV.
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On a model-specific basis, we compared the revised COP to the home
market prices, less any applicable movement charges, discounts and
rebates.
3. Results of the COP Test. Pursuant to section 773(b)(2)(C) of the
Act, where less than 20 percent of a respondent's sales of a given
product were at prices less than the COP, we did not disregard any
below-cost sales of that product because we determined that the below-
cost sales were not made in ``substantial quantities.'' Where 20
percent or more of a respondent's sales of a given product during the
POI were at prices less than the COP, we determined such sales to have
been made in ``substantial quantities'' within an extended period of
time in accordance with section 773(b)(2)(B) of the Act. In such cases,
because we compared prices to (indexed) POI average costs, we also
determined that such sales were not made at prices that would permit
recovery of all costs within a reasonable period of time, in accordance
with section 773(b)(2)(D) of the Act. Therefore, we disregarded the
below-cost sales.
We found that, for certain models of cold-rolled steel products,
more than 20 percent of the home market sales by PT Krakatau were made
within an extended period of time at prices less than the COP. Further,
the prices did not provide for the recovery of costs within a
[[Page 1109]]
reasonable period of time. We therefore disregarded these below-cost
sales and used the remaining sales as the basis for determining NV, in
accordance with section 773(b)(1) of the Act. For those U.S. sales of
cold-rolled steel products for which there were no comparable home
market sales in the ordinary course of trade, we compared EPs to CV in
accordance with section 773(a)(4) of the Act. See Calculation of Normal
Value Based on Constructed Value, below.
C. Calculation of Normal Value Based on Home Market Prices
We performed price-to-price comparisons where there were sales of
comparable merchandise in the home market that did not fail the cost
test.
We calculated NV based on delivered or FOB prices and made
deductions from the starting price, where appropriate, for foreign
brokerage and handling fees, foreign inland freight from the plant to
the customer, and insurance. In addition, we made circumstance-of-sale
(COS) adjustments for direct expenses, where appropriate, in accordance
with section 773(a)(6)(C)(iii) of the Act. These expenses included
imputed credit expenses and bank charges. In accordance with sections
773(a)(6)(A) and (B) of the Act, we deducted home market packing costs
and added U.S. packing costs.
D. Calculation of Normal Value Based on Constructed Value
Section 773(a)(4) of the Act provides that, where NV cannot be
based on comparison-market sales, NV may be based on CV. Accordingly,
for those models of cold-rolled steel products for which we could not
determine the NV based on comparison-market sales, either because there
were no sales of a comparable product or all sales of the comparison
products failed the COP test, we based NV on constructed value.
Section 773(e)(1) of the Act provides that constructed value shall
be based on the sum of the cost of materials and fabrication for the
imported merchandise plus amounts for selling, general, and
administrative expenses (SG&A), profit, and U.S. packing costs. We
calculated the cost of materials and fabrication based on the
methodology described in the Calculation of COP section of this notice,
above. We based SG&A and profit on the actual amounts incurred and
realized by the respondent in connection with the production and sale
of the foreign like product in the ordinary course of trade for
consumption in the comparison market, in accordance with section
773(e)(2)(A) of the Act.
In addition, we used U.S. packing costs as described in the Export
Price section of this notice, above.
We made adjustments to CV for differences in COS in accordance with
section 773(a)(8) of the Act and 19 CFR 351.410. These involved the
deduction of direct selling expenses incurred on home market sales
from, and the addition of U.S. direct selling expenses to, constructed
value.
Level of Trade
In accordance with section 773(a)(1)(B) of the Act, to the extent
practicable, we determine NV based on sales in the comparison market at
the same level of trade (LOT) as the EP transaction. The NV LOT is that
of the starting-price sales in the comparison market or, when NV is
based on CV, that of the sales from which we derive SG&A expenses and
profit. The U.S. LOT for EP Sales is also the level of the starting-
price sale, which is usually from exporter to importer.
To determine whether NV sales are at a different LOT than EP, we
examine stages in the marketing process and selling functions along the
chain of distribution between the producer and the unaffiliated
customer. If the comparison-market sales are at a different LOT and the
difference affects price comparability, as manifested in a pattern of
consistent price differences between the sales on which NV is based and
comparison-market sales at the LOT of the export transaction, we make
an LOT adjustment under section 773(a)(7)(A) of the Act. See Notice of
Final Determination of Sales at Less Than Fair Value: Certain Cut-to-
Length Carbon Steel Plate from South Africa, 62 FR 61731 (November 19,
1997).
In implementing these principles in this investigation, we obtained
information from PT Krakatau about the marketing stages involved in the
reported U.S. and home market sales, including a description of the
selling activities performed by the respondent for each channel of
distribution. In identifying LOTs for EP and home market sales, we
considered the selling functions reflected in the starting price before
any adjustments.
In the home market, PT Krakatau sells to end-users and local
trading companies. The respondent provides extensive selling functions
to all home market customers, irrespective of the channel of
distribution. These include technical assistance and customer support.
Therefore, we find that all sales in the home market were made at a
single LOT. In the U.S. market, PT Krakatau sells to trading companies
only. In contrast to home market sales, the respondent provides no
technical assistance, customer support, or any other selling function
for U.S. sales. Therefore, we find that all sales in the U.S. market
were made at a single LOT, which is different from the home market LOT.
Since the record contains no information that would allow us to
determine the extent, if any, to which this difference in LOTs affects
price comparability, we have not made an LOT adjustment for this
preliminary determination.
Currency Conversions
We made currency conversions into U.S. dollars in accordance with
section 773A of the Act based on exchange rates in effect on the dates
of the U.S. sales. The Department's preferred source for exchange rates
is the Federal Reserve Bank. However, since the Federal Reserve Bank
does not publish exchange rates for the Indonesian rupiah, we have
relied on exchange rates obtained from the Dow Jones Service, as
published in the Wall Street Journal.
Verification
In accordance with section 782(i) of the Act, we intend to verify
all information relied upon in making our final determinations.
Suspension of Liquidation
In accordance with section 733(d) of the Act, we are directing the
Customs Service to suspend liquidation of all entries of cold-rolled
steel products from Indonesia, that are entered, or withdrawn from
warehouse, for consumption on or after the date of publication of this
notice in the Federal Register. We are also instructing the Customs
Service to require a cash deposit or the posting of a bond equal to the
weighted-average amount by which the NV exceeds the EP or CEP, as
indicated in the chart below. These instructions suspending liquidation
will remain in effect until further notice.
The weighted-average dumping margin is provided below:
------------------------------------------------------------------------
Margin
Manufacturer/exporter (percent)
------------------------------------------------------------------------
PT Krakatau................................................ 49.28
All Others................................................. 49.28
------------------------------------------------------------------------
ITC Notification
In accordance with section 733(f) of the Act, we have notified the
ITC of our determination. If our final antidumping determination is
affirmative, the ITC will determine whether the imports covered by this
determination are
[[Page 1110]]
materially injuring, or threaten material injury to, the U.S. industry.
The deadline for that ITC determination would be the later of 120 days
after the date of this preliminary determination or 45 days after the
date of our final determination.
Public Comment
Case briefs for this investigation must be submitted no later than
one week after the issuance of the verification reports. Rebuttal
briefs must be filed within five days after the deadline for submission
of case briefs. A list of authorities used, a table of contents, and an
executive summary of issues should accompany any briefs submitted to
the Department. Executive summaries should be limited to five pages
total, including footnotes.
Section 774 of the Act provides that the Department will hold a
hearing to afford interested parties an opportunity to comment on
arguments raised in case or rebuttal briefs, provided that such a
hearing is requested by any interested party. If a request for a
hearing is made in an investigation, the hearing will tentatively be
held two days after the deadline for submission of the rebuttal briefs,
at the U.S. Department of Commerce, 14th Street and Constitution
Avenue, NW, Washington, D.C. 20230. In the event that the Department
receives requests for hearings from parties to several cold-rolled
cases, the Department may schedule a single hearing to encompass all
those cases. Parties should confirm by telephone the time, date, and
place of the hearing 48 hours before the scheduled time.
Interested parties who wish to request a hearing, or to participate
if one is requested, must submit a written request within 30 days of
the publication of this notice. Requests should specify the number of
participants and provide a list of the issues to be discussed. Oral
presentations will be limited to issues raised in the briefs.
If this investigation proceeds normally, we will make our final
determination no later than 135 days after the date of publication of
this notice in the Federal Register.
This determination is published pursuant to sections 733(f) and
777(i)(1) of the Act.
Dated: December 28, 1999.
Holly A. Kuga,
Acting Assistant Secretary for Import Administration.
[FR Doc. 00-298 Filed 1-6-00; 8:45 am]
BILLING CODE 3510-DS-P
